The post-Trump, post-election market melt-up is under threat.
The Dow Jones Industrial Average has stalled below the 20,000 level for the past five weeks. Breadth is narrowing as buyers focus on fewer and fewer stocks. And now, nagging doubts about red-hot expectations for economic expansion and earnings growth in 2017 are materializing.
While stocks remain rangebound for now, investors are piling into safe haven assets like Treasury bonds and precious metals in a way that hasn’t been seen for months. The U.S. dollar is also pulling back, catalyzed by Trump’s combative press conference on Wednesday, breaking a six-month uptrend and pushing the greenback below its 50-day moving average for the first time since September.
Precious metals stocks — an area of the market ignored and forgotten since August — looks like the biggest beneficiary here on a combination of dollar weakness, Chinese market volatility, rising inflation expectations and a general sense that a broad market selloff is looming.
Here are seven gold and silver stocks that look ready to run higher:
Kinross Gold (KGC)
Kinross Gold Corporation (USA) (NYSE:KGC) is testing above its 50-day moving average on Thursday and looks ready to break up and out of its seven-month downtrend.
The stock is recovering from a series of analyst downgrades in November and December, helped by rise in gold futures back to the $1,200-an-ounce level for the first time since November.
The company will next report results on Feb. 15 after the close. Analysts are looking for earnings of two cents per share on revenues of $854 million.
Newmont Mining (NEM)
Newmont Mining Corp (NYSE:NEM) has consolidated its recent rise above its 50-day moving average, coiling up for another attempt at the 200-day moving average.
After rising nearly 190% out of its January 2016 low to its August high, shares consolidated their gain with a 35% pullback. The bulls look ready to challenge that high which would be worth a 31% gain from current levels.
The company will next report results on Feb. 21 after the close. Analysts are looking for earnings of 33 cents per share on revenues of $1.8 billion. I have recommended January call options in NEM to my Edge Pro subscribers.
Anglogold Ashanti (AU)
AngloGold Ashanti Limited (ADR) (NYSE:AU) shares are perking up nicely, lifting away from the 50-day moving average that has kept a lid on prices since August.
Prices tripled out of their late 2015 low to the highs set last summer before profit taking pushed shares down nearly 60%. But a rebound is underway now, pushing shares up by a third from their December low.
A return to the 200-day moving average would be worth a 25% move from here for the South African miner.
New Gold (NGD)
New Gold Inc. (USA) (NYSEMKT:NGD) shares are up by a third from their December low but remain below their 200-day moving average lost back in November.
The stock remains in recovery mode, however, after bottoming at $1.76 last January before surging to a high of $6.04 last August. A return to last summer’s highs would be worth a 50% move from here.
The company will next report results on Feb. 15 after the close. Analysts are looking for earnings of two cents per share on revenues of $163 million.
Coeur Mining (CDE)
Coeur Mining Inc (NYSE:CDE) shares are rising up and over resistance near $11-a-share from early December, returning to its October-November trading range as its climbs above both its 50-day and 200-day moving averages.
This new uptrend definitively ends the six-month selloff that pulled shares down more than 40%. CDE, based in Chicago, focuses on gold and silver production in the Americas.
The company will next report results on Feb. 8 after the close. Analysts are looking for earnings of 14 cents per share on revenues of $181.9 million.
Golden Star Resources (GSS)
Golden Star Resources Ltd. (USA) (NYSEMKT:GSS), a high-risk/high-reward pick relative to the other names here, has consolidated its early 2016 gains over the last seven months after enjoying a 10-fold rise off of its December 2015 low of 14 cents.
The company, based in Canada but with operations in Ghana, trades as high as $6.01 in late 2010 before gold and silver began their multi-year pullback.
Back in November, the company reported in-line earnings of a penny per share on revenues of $55.5 million, a 1.7 percent decline from last year.
Silver Standard Resources (SSRI)
Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), based in Canada with operating in Nevada and Argentina, is consolidating near $10-a-share but looks ready to break up and out of a seven-month downtrend.
Watch for a break of its 200-day moving average near $11, which would set up a run at its November high for a 30%-plus gain from here. On Wednesday, the company reported that all three of its mines met or exceeded previously raised production guidance.
The company will next report results on Feb. 7 after the close. Analysts are looking for earnings of 24 cents per share on revenues of $172.4 million.